smart spending

Quiz: Test your financial IQ for college

College students: Welcome back! The semester has just begun, everyone still has perfect attendance and nobody's set the curve yet in chemistry. So relax, put down the backpack and take a moment to test your knowledge on one of the most important -- yet rarely studied -- subjects for college: money.

That's your money. This quiz will help you figure out what you know -- and don't know -- about budgets, credit, debt and more. It just may help you avoid some of the financial pitfalls that hamper scores of graduates as they enter the real world.

Money 101 Quiz

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You were too busy perusing your roommate's Facebook photos to pay attention to the paperwork your parents asked you to sign for your new credit card. You DO remember that you now share responsibility for paying their credit card bill. Your parents have made you a/an ________ on their credit card account.

Bumper stickers and sweatshirts are passe. You prefer to show pride by applying for a school-branded credit card. How did your school's logo get on that credit card?

Good news: You scored an off-campus apartment for next semester. Bad news: Paying rent requires a strict budget. A friend suggests a prepaid debit card to help limit your spending, but he warned you that you may pay fees for ______.

You did your homework on prepaid debit cards and you're not happy that they won't help you build credit. Now you're researching secured credit cards. Pop quiz! How is it different from a regular credit card?

Your relatives have been yammering about the importance of budgeting. Which of the following is NOT the name of a budgeting method?

Speaking of funny names, there are a few for debt-elimination strategies. Take a look at the list and pick the one that is NOT the name of a technique for paying down debt.

You got an off-campus job to help pay for school, but now you need a car. You've saved $500 for a down payment and plan to finance the rest. How is the interest rate on your car loan determined?

You've started getting offers from banks saying you're preapproved for a credit card. How do they know you qualify?

Your rent's going to be late. A friend says you could buy time by paying with a check, even though you know it will bounce. What's wrong with this scenario?

Rent crisis averted! Now it's a bank representative who's knocking at your door. She says her company's giving away free pizza to students who apply for a credit card at their table in the student union. Does this sound fishy?

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Authorized user
Probably not. The way most banks and card issuers define "authorized user," you wouldn't share responsibility for paying the debt.
Leech
Don't be so hard on yourself. Most students don't have any credit history, good or bad, and therefore have trouble qualifying for a credit card. There's no shame getting some help.
Co-signer
Primary cardholder
Probably not. Your parents are the primary cardholders because they were approved to open the account in the first place. That's also what gave them the authority to add you to the account.
Dean won a bet
Sorry! It takes more than luck to get a university logo onto a credit card.
School pays credit card issuer
Close, but no. Typically these deals involve the card issuer paying the school to use its name, logo and mailing list.
It's part of a fundraising campaign
It's not uncommon for alumni associations to market these credit cards, but this arrangement is different from your run-of-the-mill fundraising campaign.
Credit card issuer pays school
Not using the card
You're only partially right. Some banks charge fees, usually a couple of dollars a month, if the prepaid card has a $0 balance for a long time. Some cards will also charge you a monthly fee, up to $10, unless you set up a direct deposit on the card.
Paper statements
You're only partially right. To persuade you to give up paper, many prepaid debit card issuers charge a fee for hard copies.
Using an ATM
Close, but it's likely not the only fee prepaid debit card holders may have to pay. While we're on the topic: Check to see if you're studying in a city with high ATM fees.
All of these and more
You post collateral to get the card
Missing payments won't hurt your credit score
Not true. Although secured credit cards are generally regarded as financial products for people trying to build or fix their credit, they can still hurt your score.
Your identity and account info can't be stolen
The "secure" in the name of this financial product doesn't have anything to do with protecting yourself from identity theft.
It's the same in every way
Secured credit cards are different in a few key ways. Unlike a typical credit card, you need to give the issuer a deposit to get the secured credit card.
"Tracking to the Dollar"
This is an actual budgeting method, where you round each expense up or down to the nearest dollar, record it all in a spreadsheet and review it weekly or monthly to find ways to cut costs.
"Benjamins"
"Pay Yourself First"
This budget method has also been called reverse budgeting. With this system, you automate payments into your savings account or 401(k) -- or both -- so that you never have a chance to spend the money.
"Envelope"
This budgeting method requires you to dust off your stationery. The idea here is to put cash in an envelope for categories of spending, like groceries, and make that money last until it's time to refill it at the end of the month.
"Earthquake"
"Snowball"
This strategy works best for debtors who need an early jolt of motivation. Accelerate payments on your smallest debt by paying the minimum on all your other bills. Keep moving through your debts, tackling the next smallest as you go.
"Consolidation"
This is a real strategy, but one that most debt counselors and financial advisers warn clients to avoid. If it's something you're considering, use Bankrate's Debt Consolidation Calculator to do some research first.
"Avalanche"
This is a variation of the snowball method that targets the debt with the highest interest rate. When you pay off a debt, you roll money used for those payments into payments for the next highest interest rate.
It's the same as your credit card rate
Nope. Car loans and credit cards are very different. The first is a one-time loan and the other is a revolving line of credit.
The price of the car
You won't necessarily pay higher interest on an expensive car.
Depends on the amount and term of the loan
They're the same for everyone
Sorry! You and your roommate could buy identical cars, but the interest rates would vary depending on the term, size of the down payment and your individual credit scores.
The bank is bluffing
Although it usually pays to be skeptical, the bank can make an educated guess about whether you qualify for a credit card before you submit an application.
The bank checked your account balance
A bank you don't already do business with has no legal way of knowing how much money is in your checking account without your permission. Even if there were, it would be a poor indicator of whether you qualify for a credit card.
Banks can run credit checks without your permission
Someone applied without your permission
You shouldn't treat preapproved card offers as red flags. You SHOULD be worried, however, if you get approval or denial letters for cards you never applied for.
Nothing
If only it were so. Landlords hate bounced checks. So does your bank, which will likely charge a fee for writing a check that couldn't be cashed. Use our Cost of Living Calculator to adjust your budget.
It's going to irritate your landlord
Yes, but you're only partially right; there's more to it. Even if your landlord hated you for some other reason -- political views, favorite sports team, taste in interior design -- he or she would likely overlook it as long as you pay rent on time.
It could hurt your credit score
That's certainly possible. Experian, one of the three major credit bureaus, factors rent payments into your credit score. TransUnion just started collecting rent payment history.
Answers 2 and 3
It sounds cheesy and delicious
Quiet thy hungry stomach! Most campus clubs use food to lure potential members to meetings. Score cheap meals that way and steer clear of this bank. What they're doing is illegal.
Yep, fishy and illegal
Nah, just annoying
You may be annoyed that her knocking interrupted your homework, but her tactics are also illegal.
No, it's helpful
Don't be wooed just because pizza's involved. Do your own research on credit cards and do your neighbors a favor by reporting this bank to the Consumer Financial Protection Bureau.

Want more help learning about budgeting, credit scores, debt reduction and building credit works? We've got you covered.

Few, if any, college brochures will mention it, but earning a degree of any kind often requires students to make some big financial decisions. The following Bankrate calculators will help you figure out how to manage your money, leaving you more time to worry about midterms, draconian professors and internships.

Should you buy or lease a car?
How much money should you put down when buying a car?
What will your monthly car loan payment be?
When will I pay off my student loan debt?
What’s the cost of living in the town or city I’m moving to?
How much money should I budget for one year of college?
How do I create a basic budget?

Since you now share responsibility for paying the bill, you will build a credit history. But being a co-signer can backfire if you're not careful. Make sure the credit card bill is paid on time and in full.

Credit card issuers routinely pay colleges and universities to use their name, logo and mailing list. You can check whether your school has entered into one of these agreements here.

Companies may charge fees for all the reasons shown, as well as activation, calling customer service, reloading the card, balance inquiries, transactions that require signatures and paying recurring bills, like Netflix or a gym membership. Do your research to find the best prepaid debit cards.

Unlike regular credit cards, secured credit card issuers ask for at least $250 to $500 in collateral to get a secured credit card. The credit limit is usually the same as your initial deposit.

Walk around with a wallet full of $100 bills and you'll save money! If this answer sounds a little off, that's because it's not the name of a real budgeting method.

As far as we can tell, there is no well-known strategy for eliminating debt that goes by this nickname. That doesn't mean you should wing it when it's time to pay off your student loans. Use these real strategies.

And you can use the Bankrate Auto Loan Calculator to estimate the interest rate and monthly payments.

It's legal for a bank to run a preliminary credit screening to find potential customers. And, despite the envelope's promise, a bank can turn you down for the card if a more thorough look at your credit history is less than flattering.

You risk both eviction and a lowered credit score when you don't pay rent on time.

Your gut, although it may crave pizza, is right. The CARD Act requires banks to stay away from college campuses if they're offering gifts, food or other perks to customers who sign up for credit cards.

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